Thursday, 17 October 2013

Focus on Financial Balance

Today's post is about me working towards achieving financial balance. You may remember that I identified it as an area of my life that requires more control (Balance) and there are many ways I could be doing better. When I started my health and fitness journey on New Years Day I never envisaged just how far it would take me. Being physically fit and giving up smoking led me to make changes to other areas of my life, which as we know, has a good way. 

With regards to my finances, I want to focus more closely on my personal spending. Every fortnight when I get paid I put money into a joint account to pay for bills and our mortgage. Any surplus becomes our savings. Earlier in the year I examined everything we pay and shopped around to get the best deals. These are some of the things I did:

1. Insurance - combined the policies for mine and my daughter's cars, saving $20/ month.

2. Home Loan - we looked at refinancing to a lower rate but when I rang our current bank they offered a reduction of .25% as we were looking around. Bank's don't want to lose your business. This really surprised me and I urge everyone to do the same. Talk to your current bank first as the cost of refinancing with exit and entry fees can sometimes outweigh the reduction in interest that another bank offers. This saved us $50/month.

3. Credit cards - As much as I try to pay my balance off every month, this year has been a difficult one and we do owe money on two cards. ANZ bank offered a credit card with 0% balance transfer for 9 months so I transferred my balance to them and am saving about $100/month interest for 9 months. The interest rate after that time is also 7% less than what I am paying now so if they are not completely paid off by then, I will still be saving. But, I will pay them off by then, right?

4. Electricity - We made the decision to install solar panels as we registered for the high feed tariff of 44c. Origin gave us another 8c on top of that making it 52c. As our electricity costs are regulated in QLD the retailers all have to charge the same tariff but their running costs vary. I joined The One Big Switch which 40,000 Queenslanders registered for, and as well as cheaper admin fees, they gave us another 2c feed in tariff. So we feed electricity into the grid at 54c and buy it back at around 27c. I finally got our first bill and we are $38 in credit. Although we are paying $300/month for two years for our panels, after that time we will have no energy bills. Yippee!! This will save us around $2000 per year.

5. Fuel - I can't control the fuel prices but I now fill up at Coles Express so that I can use my Fly Buys Card (this is fairly new too) and where I can get at least 4c off per litre using my Coles dockets. Coles are more expensive than Aldi so I don't shop there all the time but twice now I have collected enough Fly Buys points to get $20 off my spend there. So it works for me.

6. Phone and internet - Unfortunately the only service we can get here is Telstra who are the most expensive. I did manage to score NBN Satellite internet as our wireless service here is too slow. This gives us a slightly faster internet service with 30GB more usage per month, and saves $30 per month in fees. Well worth it! We are on the waiting list for ADSL but that could take years now the Government has changed here.

So, I have examined all of my major expenses this year and reduced as many of them as I can. Now let's start on my personal finances. Every fortnight I have a budget as follows:

Groceries  $400
Fuel        $  80
Savings    $100
Me          $  80
Total       $660

The only factor I cannot change with this budget is the fuel. It costs at least $80 every fortnight to get to work and back because I live out of town. I do restrict my driving on weekends however and try to avoid going to town. For example, I do my groceries on a Friday night after work to avoid going into town on Saturday.

The $100 savings I automatically transfer to another account when I get paid, and I then take the rest of the money out in cash. I keep the grocery, fuel, and my money in separate compartments of my wallet. Generally the $40 a week I have left for myself gets spent at the pharmacy or if the boys need money for school. I take my lunches to work every day and drink water from the bottled supply at work.

So, the only area left that I can save on is my groceries. I have already made steps towards this by making my own cleaning products and buying a water filter so we don't have to buy bottled water.

However, my grocery bill is still around $200/week. That's $10,400/year! Where does the money go? I decided to analyse my dockets more closely and see exactly where my money is going, in order to try and work out where I can make some savings. It was a fiddly process crossing items off the docket as I entered them into the calculator. This is the result for my grocery spend on Friday last week.

Non Food = $12.46
Re-usable bags = $8.94
Meat = $54.69 (nine meals,bulk buy)
Fruit & Veg = $31.10
Dairy = $20.03
Ingredients/Staples = $35.58
Ice Cream = $6.18
Freezer = $8.78
Wraps/Bread = $8.66
Drinks = $14.44
Lunchboxes = $17.95
Biscuits/Snacks = $6.71
Nuts = $6.98

Total $232.50

I did replenish my supply of re-usable shopping bags which is a one-off expense, but the rest of the results when I categorised them were surprising to me. My biggest expense besides meat is my fruit and vegetables. I did not realise I was spending this much. I do tend to overstock and last week before the shop I made a huge dahl (lentil and vegetable curry) in the crock pot to use up the leftover vegetables. Some of this I froze and the rest I have used for lunches. I won't be growing enough vegies to totally wipe out his expense so I think a weekly trip to the markets may reduce this expense...and better planning as to how much I actually need to buy.

The other areas I will target are the soft drinks ($7 of the drink spend) and lunchbox snacks for the boys. I will try switching over to cordial which is cheaper (there will be protests) and making some of their lunchbox food from scratch. I have the luxury of time this week to experiment, and at the end of the day, this switch will be healthier for them.

Anyway, I have now set a goal to reduce my weekly grocery bill to $150 instead of $200. This will save around $2600/year which is easily a nice family holiday or Christmas presents paid for. Even if I can only reduce it to $175/week then I will still save $1300/year.

I can almost see the pina colada with the colourful umbrella sticking out of a wedge of pineapple, and the blue ocean in the background as I lounge on the deck of the cruise ship....what great motivation to do my shopping more wisely and think about what I am buying. To make things more accountable I will track my spending on my blog each week and keep you updated with how I am progressing. It will force me to keep dockets and control my purse strings by being accountable to you.

How do you budget for your groceries? Do you overspend? 

Is $150/week for a family of five achievable or am I dreaming?

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